Trump's Nvidia Chip Smuggling Crackdown Stalled Three Times as Lutnick Warns of China Trade War
U.S. President Donald Trump has reportedly approved a crackdown on suspected Nvidia chip smuggling to China on three separate occasions this year, but the proposed measures have yet to be implemented. According to a report by Axios cited by Coin Bureau, the effort has faced resistance from Trump's own Commerce Secretary, Howard Lutnick, who warned that the action could trigger a trade war with China.
The dispute centers on the proposed restrictions targeting companies suspected of facilitating the illegal transfer of Nvidia's advanced artificial intelligence chips to China. Despite Trump's repeated approval of the crackdown, Lutnick has reportedly opposed moving forward, creating a disagreement within the administration over how aggressively to address the suspected technology transfers.
Trump Repeatedly Pushes for Action Against Suspected Smuggling
According to Axios, Trump approved the proposed crackdown three times this year, but the enforcement measures have not materialized. The latest development reportedly followed a conversation last week involving Trump and Elon Musk, who had supported the proposed action.
During that discussion, Trump contacted Musk and subsequently instructed officials to move forward with the plan. Coin Bureau cited Trump's reported statement to officials: "Let's get it done."
Despite the presidential directive, Lutnick remained the only official identified in the report as opposing the crackdown. His position reportedly reflects concerns about the potential economic and diplomatic consequences of imposing restrictions on companies suspected of supplying Nvidia chips to China.
Howard Lutnick Warns of Potential Trade War With China
Lutnick reportedly argued that implementing the proposed restrictions could escalate tensions between Washington and Beijing.
According to the report, the Commerce Secretary warned that the crackdown "will start a trade war with China." His opposition has reportedly prevented the administration from implementing a measure that Trump has already approved multiple times.
The disagreement highlights competing considerations within the administration: restricting suspected transfers of advanced semiconductor technology while avoiding further deterioration in U.S.-China trade relations.
Classified Memo Referenced Jensen Huang and Suspected Chinese Spy
The report also contains another sensitive detail involving Nvidia chief executive Jensen Huang. Lutnick had reportedly received a classified memo in May concerning Huang's relationship with a woman suspected of being a Chinese spy.
The existence of the memo adds another dimension to the reported discussions surrounding Nvidia, China and national security. However, the information shared by Coin Bureau does not establish the contents of the classified document or provide further details about the alleged relationship.
Megaspeed Could Face Blacklisting
If the proposed crackdown moves forward, companies such as Megaspeed could face blacklisting, according to the report. Megaspeed was identified as the company at the center of the scandal involving suspected Nvidia chip smuggling.
Being blacklisted could restrict a company's access to Nvidia's chips, potentially preventing it from obtaining the semiconductor products targeted by the proposed enforcement measures.
The proposed action has yet to be implemented despite Trump's reported approval on three occasions this year. With Lutnick warning of a potential trade war with China and Trump again telling officials to proceed last week, the dispute over the crackdown remains unresolved.
Writer: Victoria HaleTechnology & Blockchain WriterVictoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.She prioritises clarity and accuracy when explaining technical developments to a general audience.
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